Betsson revels in Q1 growth as operating profit hits record €57.9m

Betsson CEO and president Pontus Lindwall has praised the group’s “positive” start to 2024 after it posted an increase in revenue, higher net profit and record operating profit in Q1.

For the three months to 31 March, revenue hit €248.2m (£212.9m/$266.3m). This is 11.9% higher than in Q1 last year, with Betsson reporting growth across several key markets.

Among several highlights for Betsson during Q1 was the launch of a second brand in Italy. Its flagship Betsson brand went live in March, accompanying StarCasinò that has been active in Italy for over a decade.

In Q1 Betsson also announced the launch of Betfirst in Belgium, further extending its reach in the Western Europe region. In addition, it acquired Holland Gaming Technology, a gaming operator with a Netherlands licence, and game studio Holland Power Gaming.

Further afield, Betsson went live in Cordoba in Argentina. This means that the group now offers games under local gaming licences in three Argentine provinces. However, it was not enough to prevent a slight drop in Latin American revenue.

“Betsson’s ambition is to generate stable earnings growth in the long run,” Lindwall (pictured) said. “The strategy to achieve this is based on geographic diversification and growth investments within existing markets, new markets, B2B and M&A.”

Casino growth offsets sportsbook decline

Breaking down the Q1 figures, there were mixed results for Betsson across its core segments. Casino revenue increased 18.7% to €180.5m, helped by the launch of 306 new games during the quarter.

Casino revenue from mobile was €151.2m and accounted for 84.0% of total casino revenue. In addition, casino gross turnover climbed 13.8% to €8.81bn for Q1.

However, sportsbook revenue slipped 2.5% to €65.5m, with 81.0% coming from mobile. This was despite a 24.9% increase in gross sports betting turnover to €1.66bn.

Revenue from other products including poker and bingo also dipped 18.5% to €2.2m. 

Western Europe and CEECA drive growth at Betsson

In terms of geographical performance, Central and Eastern Europe and Asia (CEECA) is still the core region for Betsson. In Q1, revenue jumped 18.0% to €110.1m, or 44.0% of total revenue. This was helped by record figures in Croatia, Greece and Latvia.

Elsewhere, Western Europe revenue jumped 59.9% to €43.4m, mainly due to new launches in Belgium and Italy. Western Europe accounts for 17.0% of all revenue at Betsson.

However, Betsson noted declines across other regions. Nordics revenue slipped 9.6% to €46.9m, with Sweden reporting lower activity across sportsbook and casino. Latin America revenue also fell 3.3% to €43.7m, although this was mainly due to negative currency effects in Argentina.

Rest of world revenue slipped 5.8% to €3.9m, mainly driven by a negative currency effect in Nigeria.

Net profit tops €42.8m

As for spending, total operating costs edged up 1.4% to €106.0m while cost of services was up 13.3% to €84.3m. This meant an operating profit of €57.9m, an all-time quarterly high for Betsson.  

Financial costs totalled €3.4m, leaving a pre-tax profit of €54.5m, up 33.3% year-on-year. The group paid some €11.7m in tax, meaning it ended Q1 with a net profit of €42.8m, an increase of 16.9%. 

In addition, adjusted EBITDA for Q1 amounted to €71.6m, up 31.9%, with a higher margin of 28.8%.

“After the positive start to the year, we now look forward to following the final rounds of the European football leagues and cups, before it is time for the best national football teams to measure their strengths in the UEFA Euro 2024 and Copa America in June and July,” Lindwall said.

“There is football fever out there and within the entire organisation a number of activities are already under way to ensure that Betsson will be able to deliver a powerful player offering for new and existing customers during these major championships.”

Regulatory concerns for Betsson

However, it was not all plain sailing for Betsson in Q1. In February, Betsson’s BML Group subsidiary became the first gambling operator to be blacklisted by Finland’s National Police Board (NPB).

The ruling followed Betsson losing a court case to the NPB. Banks, payment service providers and virtual currency providers are now obliged to block all money transfers from Finland to BML.

Only Veikkaus, Finland’s gambling monopoly, can operate in the country and market its services.

Elsewhere, shortly after the quarter end, Betsson was named as one of more than 40 major operator brands being blacklisted by the Dominican Republic. 

This comes as the market prepares to re-regulate. Resolution 136-2024 was signed into law on 26 March, providing a new regulated framework for online gambling.

With a new licensing framework in place, operators who do not have a licence will no longer be authorised to operate in the country. These include Betsson, Betway, Betfair Colombia, Bet365, Mr Green Casino, 888Sport and William Hill.